Property Taxes vs Home Price Inflation
I was wondering the other day if property taxes kept Texas from participating in the real estate bubble. If you look at the tax rates by state, you will see that Texas is ranked second in median tax rate nationwide.
What I have noticed is that there has not been a significant increase or decrease in the home values in the area. If you look here, you will see the home prices have only increased 16.2% in DFW over the last 5 years. Inflation over the same time 5 year period was 14.29%, so while homes in other parts of the nation might have been appreciating at gangbuster rates, Texas was flat.
During the same time period that DFW increased by 16.2%, LA increased by 63.12%. Median tax rate in California 0.48%. Were the tax rates in Texas preventing Texas from participating in the housing bubble? Doing more research, I could probably show a correlation between tax rates and price volatility.
Since I don’t like taxes, and on good days I like price volatility, that is the last thing I want to show. I have always thought that Texas property taxes have kept Texas real estate from being as high as the rest of the country for similar sized metropolitan areas, and this appears to be more support for that theory.